Sports Direct to hold shareholder vote on Ashley's brother
Millionaire boss Mike Ashley's brother, John Ashley, is, according to a review by a law firm, owed £11million in backdated pay from Sports Direct for his role in the company's development.
Sports Direct is holding a special general meeting to determine whether the company bosses's brother can receive £11million in backdated pay.
Millionaire boss Mike Ashley's brother, John Ashley is, according to a review by a law firm, owed the money by Sports Direct for his role in the company's development since its flotation in 2007.
Mike Ashley said: 'I fully expect that independent shareholders will vote against this proposal due to the passage of time involved, although in my opinion, technically the money is owed and therefore should be paid.'
Pessimistic: Mike Ashley 'fully expects' independent shareholders to vote against the motion
A joint report by law firm RPC and accountancy group Smith & Williamson said if John Ashley had been treated like other senior executives, rather than Mike Ashley's brother, he would have received total payments of £11million.
John Ashley, who now holds a position in IT at the company, was 'denied' the multi-million payslip due to 'concerns at the time about public relations.'
At 11am on 13 December in Derbyshire, Sports Direct's independent shareholders will vote on whether or not John Ashley's £11million backdated pay should be granted to him.
Younger brother and current boss Mike Ashley is abstaining from the vote.
Mike Ashley said in a statement: 'I intend to voluntarily abstain from the vote on whether or not John should receive the money that he would otherwise have earned at Sports Direct if he were not my brother.'
He added: 'It's important for me to say that if John had owed one pound to Sports Direct, I would have ensured any sum was repaid in full. I hope shareholders will therefore be reassured that everything is in order and that any concerns are laid to rest.
'I always put the interests of Sports Direct ahead of my own. An example of this was the loan facility for £250m that I previously made available to the Company.
'No arrangement fees or commitment fees were ever charged on this facility, which was capped at an interest rate of 0.5%.
'This was at least 50% below the prevailing rate that Sports Direct was paying at the time, and the facility saved the Company in excess of £1m. I want you to know that I will continue to put Sports Direct first as we move forward together.'
Abstaining: Younger brother and current boss Mike Ashley is abstaining from the vote
The second resolution going to a vote at the meeting on 13 December concerns a possible increase of the 'minimum guaranteed value per ordinary share, applicable to employees participating in the Company's employee share schemes.'
Amid claims of 'Victorian' conditions at its Shirebrook warehouse in the last few years, Sports Direct has implemented a number of reforms to its workplace practices.
Winning: Earlier this year, Newcastle United football club owner Mike Ashley won a high court case over an allaeged £15million deal
Earlier this year, Newcastle United football club owner Mike Ashley won a high court case over a £15million deal allegedly made in a London pub one evening.
The case centred on an allegation made by investment banker Jeffery Blue during a night of 'heavy drinking' at the Horse and Groom pub in London in January 2013, claiming Mike Ashley agreed to pay him £15million if the company's share price doubled to £8.
Mike Ashley won the case. He recalled: 'I do remember that we had a lot of drinks and a lot of banter.'
In September, Sports Direct's chairman Keith Hellawell narrowly escaped being booted out following shareholder attempts to oust him. Forty-seven per cent of the company's independent shareholders opposed his re-election.
Over the summer, the sports retailer posted a 58 per cent drop in underlying profits to £113.7million.
Sports Direct's share price is up 0.79 per cent to 384.8p.